S. M. Smith, dоing business as Tic-Toc Beverages, plaintiff below and appellant here (hereinafter callеd Smith), sued Maryland Casualty Company, defendant below and appellee here (hereinafter called Casualty Company), in circuit court on a fidelity bond. The court sustained a plea in bar and dismissed the suit. Hence this appeal.
Casualty Company issued to Smith a commercial blanket bond indemnifying Smith against loss оf money or other property sustained through any fraudulent or dishonest act or acts committed by any of Smith’s employees, to an amount not exceeding $10,000. The declaration charged that two of Smith’s emрloyees dishonestly misappropriated merchandise in excess of $10,000 while the bond was in force.
Uрon motion of Casualty Company, the court ordered Smith to furnish a bill of particulars, and in response Smith filed a statement that the misappropriated property consisted of intoxicating liquors. Casualty Cоmpany then answered and included a plea in bar based on Mississippi Code Annotated section 2613 (1956), making the possession of liquor in Mississippi a violation of the law, and on the ground that the maintenance of Smith’s action would violate the public policy of the State of Mississippi, and further that under Mississippi Code Annotated section 2618 no property rights exist in liquor. Upon the hearing of this plea in bar, it was stipulated that the agent of Casualty Company, with authority so to do, wrote Smith prior to the alleged loss stating that the bоnd was written with the express understanding and representation that the Casualty Company waived any defense of any legal action under said bond on the basis that Smith was engaged in an illegal activity. The
Smith contends that collateral contracts in which no illеgal design enters are not affected by an illegal transaction with which the contract is only remotеly connected. We are unable to agree that this bond was only remotely connected with an illеgal activity. The bond gave protection to Smith’s illegal liquor business and in order to recover Smith requires thе aid of the evidence showing his illegal activities. We said in Capps v. Postal Telegraph Co.,
The bond, as applied to the business in which Smith was engaged, furnished aid and protection to his illegal business, and in order to reсover Smith must base his cause of action on his own admitted illegal act. Under these circumstances the courts will not enforce the contract. See Powelson v. National Air Lines,
We have carefully considered the authorities relied upon by appellant and they do not justify a holding that the fidelity bond involved in this case was only incidentally, indirectly, or remotely connected with Smith’s illegal liquor business. Edwards House v. Davis,
American Equitable Assurance Co. v. McWhirter,
We have carefully considered the commitment Casualty Company made not to defend any claim on the ground that Smith was in an illegal business. The policy of the State cannot be waived by private contract. Otherwise, the public policy of the State would be subject to the will of cоntracting parties.
In. view of the commonly known fact that the prohibition laws are not enforced in some areas, and the fact that the. State collects a “black market” tax on liquor sold in this.- State, the Court has given careful consideration to the reasons underlying the rule gov
Affirmed.
